It’s a new year and a new filing season. That means the Internal Revenue Service is hard at work fighting some long-running scams aimed at tricking taxpayers out of their hard-earned money.
Many times, the thieves impersonate IRS officials and may use text message scams, email or phone scams. This year, the IRS cautions that the thieves may even use unemployment fraud for their illegal purposes. And it’s a racket that extends beyond filing season.
“With filing season underway, this is a prime period for identity thieves to hit people with realistic-looking emails and texts about their tax returns and refunds,” said IRS Commissioner Chuck Rettig. “Watching out for these common scams can keep people from becoming victims of identity theft and protect their sensitive personal information that can be used to file tax returns and steal refunds.”
Known as the Security Summit, the Internal Revenue Service’s partnership with state tax agencies and national tax industry leaders has warned the nation’s taxpayers to watch out for common scams this tax season—but to also remain vigilant all year long.
To help taxpayers guard against these schemes, here’s how the most common examples work.
Text Message Scams
Text messages that falsely purport to come from the IRS were on the increase last year. These scam message show up unannounced on taxpayers’ smartphones and usually mention COVID-19 or “stimulus payments”—or both.
The bogus text messages also contain fake links to nonexistent IRS websites or online tools, that, once they’re clicked, instead can install malware on the recipient’s computer, or trick the recipient into divulging personal identifying information.
The IRS says the defense against these text messages is simple: NEVER click links or open attachments in unsolicited, suspicious or unexpected text messages, no matter if they claim to come from the IRS, state tax agencies or some company within the tax community.
While the IRS has its Secure Access authentication tool, the agency does not use text messaging to communicate personal tax issues such as bills or refunds. The IRS also stresses that it doesn’t send messages to taxpayers using social media.
If a taxpayer gets an SMS or text that they suspect to be a scam, the taxpayer should take a screenshot of the message and send the screenshot in an email to [email protected]. Include the date, time and timezone the taxpayer got the message as well as the telephone number that received it.
While the IRS says it will never leave prerecorded, urgent or threatening messages on taxpayer’s phones, the scammers sure will.
Most of the variations on the phone scam theme feature threats that the IRS can’t and won’t make. The threats made are a common thread among all IRS-spoofed phone scams, including messages that if the recipient doesn’t call back, a warrant will be issued for their arrest, intervention by law enforcement, deportation or revoking the recipient’s licenses.
Here’s a list of things the IRS—and its authorized private collection agencies—will never do:
- Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS does not use these methods for tax payments.
- Threaten to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
- Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.
- Ask for credit or debit card numbers over the phone.
Generally, the IRS will first mail a bill to any taxpayer who owes taxes. All tax payments should only be made payable to the U.S. Treasury. Checks should never be made payable to third parties.
If one of these scam calls is received by a taxpayer who doesn’t owe taxes and has no reason to think they do, the first line of defense is evasion: don’t give out any information and hang up immediately.
Second, report the call to the Treasury Inspector General for Tax Administration (TIGTA) at IRS Impersonation Scam Reporting.
Taxpayers should also email the IRS at [email protected], giving them the caller ID or callback number. Remember to put “IRS Phone Scam” in the Subject line. Lastly, taxpayers can report the scam call to the Federal Trade Commission on its FTC.gov website. Add “IRS Telephone Scam” in the notes.
If a taxpayer gets a call and owes tax—or thinks they do—they should go online to view their account information at IRS.gov to see the official amount that they owe. They can also look over their actual payment options.
Next, call the number on the billing notice that arrived in the mail or call the IRS at 800.829.1040 for help from a REAL IRS employee.
Unemployment fraud becomes apparent when workers are sent unemployment claims or other benefit payments for which they never applied.
Indeed, states have seen an increase in fraudulent unemployment claims, filed by organized crime using stolen identities to fraudulently collect benefits.
These benefits are taxable, so states issue Form 1099-G, Certain Government Payments, both to the recipient and to the IRS. The form reveals any taxable compensation received and the tax withheld.
A worker who gets a fraudulent or incorrect 1099-G should contact the issuing state agency immediately to request a corrected 1099-G.
For more on how to report unemployment fraud, getting a corrected Form 1099-G, and other steps, visit the U.S. Department of Labor’s site at DOL.gov.
Employees may be targets of unemployment identity theft if they received:
- Mail from a government agency about an unemployment claim or payment for which they did not file. This includes unexpected payments or debit cards and could be from any state.
- An IRS Form 1099-G reflecting unemployment benefits they weren’t expecting or didn’t receive. Box 1 on this form may show unemployment benefits they did not receive or an amount that exceeds their records for benefits they did receive. The form itself may be from a state in which they did not file for benefits.
- A notice from their employer indicating the employer received a request for information about an unemployment claim.
Email Phishing Scams
Let’s get to the bottom line up front: When the IRS has to reach out to an individual taxpayer, it does so through the U.S. Postal Service—the regular mail. The IRS does NOT use email to request personal or financial information.
Taxpayers should be very suspicious of any unsolicited email that claims to be from the IRS or another program closely linked to the agency. If a taxpayer gets one of these suspect emails, they should send the email as an attachment to [email protected]. The IRS’ Report Phishing and Online Scams page has more information.
Taxpayers are being warned to pay special attention to how the IRS website is used in suspicious emails and other scam documents. The official IRS website is IRS.gov. If a purported IRS website ends in “.com,” it’s a scam. All the official IRS webpages, forms and online tools all end in “.gov.”
For more information on scams, see Tax Scams and Consumer Alerts on IRS.gov.